At equilibrium,
A) The benefits associated with one additional hour of leisure are equal to the costs in disutility of giving up more than one hour of the leisure.
B) The benefits from revenues through one additional hour of work are equal to the costs in disutility of giving up one additional hour of leisure time.
C) Additional revenue sources provide leisure benefits.
D) Both a and b.
E) Both b and c.

Question

Quizplus · Accepted Answer

At equilibrium, the marginal benefit of one additional hour of work is equal to the marginal cost of giving up one additional hour of leisure. This means that the benefits from revenues through one additional hour of work are equal to the costs in disutility of giving up one additional hour of leisure time. Therefore, option B is the correct answer. Option A is incorrect because it refers only to the benefits of leisure, not work. Option C is incorrect because it implies that revenue sources provide leisure benefits, which is not necessarily true. Option D is incorrect because option A refers only to the benefits of leisure, while option B refers only to the benefits of work.

At Equilibrium